Eastern promise lures City chiefs

CLARA FURSE, chief executive of the London Stock Exchange, will next month lead a high-powered delegation to China to persuade thousands of former state-owned businesses to float in the City.

Massive reforms in China mean that 250,000 businesses are potential candidates for privatisation.

LSE officials acknowledge that the weakness of Chinese company law and virtual absence of corporate governance means that only a few thousand of them will be in a position to get a London listing.

Despite this, Furse and the LSE's new chairman, Chris Gibson-Smith, are determined that the City should benefit from the wave of Chinese privatisations.

Tapping into the LSE would provide Chinese companies with the backing to compete with foreign firms and allow European investors to take part in China's 'manufacturing miracle'.

Crucial to the LSE's plans will be a 'co-listing agreement' with the Hong Kong Stock Exchange, which it hopes to sign later this year. That will mean Chinese companies will have to satisfy only the listing particulars for the Hong Kong exchange to be quoted automatically in London.